Daniel Thomas

You WILL be wrong....often... Being "right" all the time is NOT the goal. The goal is to understand that with a reliable strategy, the statistics/math favor you as a trader OVER TIME (REPITITIONS). In the world of trading you're either the gambler, or the casino. Your goal should be to identify/leverage a statistically predictable strategy/scenario (ie: "technicals"), then use said strategy to do the same thing over, and over, and over, and over again... If you flip a coin, for example, you have a 50/50 chance of hitting heads, versus tails.... on any given flip.. If you demand $1 for every time you're right, and are willing to pay $1 for every time you're wrong -- statistically, you'll end up break even. If, however, you demand $2 for every time you're right, and are willing to pay $1 every time you're wrong -- statistically, you'll end up profitable... Example with 10 flips: flip 1: you lose $1 flip 2: you lose $1 flip 3: you lose $1 flip 4: you lose $1 flip 5: you lose $1 flip 6: you win $2 flip 7: you win $2 flip 8: you win $2 flip 9: you win $2 flip 10: you win $2 In this example, you were right 50% of the time (as statistically expected). Yet you walk away profitable: 5 flips of Losses = $5 5 flips of Gains = $10 -- --- -- --- - Equation: $10-$5 = $5 (in profits). - -- -- -- --- - -- You were "right" 50% of the time, yet you still made money... THIS IS WHAT TRADING "TECHNICALS" IS ALL ABOUT. Your goal is to identify a pattern/indicator/set of variables that is statistically predictable, THEN -- apply a reward/risk scenario to said situation, and leverage math/statistics to your advantage. In essence, you're making yourself the CASINO, not the GAMBLER... In the aforementioned example (the flipping a coin example), anything greater than a 1:1 ratio is a "good" reward/risk scenario (because the odds of you "winning" vs "losing" is 50/50. I used a 2:1 scenario for simplicity. I used to have a pretty big YouTube channel discussing concepts such as this. I don't like "social media," however, so it's always been hit & miss (with my content). I do have a few videos that are still up on Youtube (the newest channel). You're welcomed to peruse a few of them, and ask any questions desired. Here is a link to a more popular video: In any case... Just maintain focus. Andrew and his crew are VERY GOOD traders. My journey essentially began here (years ago), and I will forever be grateful for the leadership & mentoring Andrew provided. Keep your head in the game...accept the FACT that you will go through ups & downs...and with the right amount of perseverance, dedication, and DISCIPLINE -- you'll come out ahead in the end... GL; STAY GREEN!

Have you considered futures? I've recorded hundreds of videos over the years discussing venues for trading in "small" accounts. My favorites at the moment: 1) Futures: Really good leverage, no PDT, and far less volatile than some of the stock tickers I/we usually trade. Here is a video from a "challenge" I did not too long ago. As you can see, the results can compound very, very quickly: 1b) You can also get involved with futures via a "prop" firm. I have multiple videos on topic, so if you're interested --- reach out and I'll try to opine when/where capable. Here is a video to get you started: 2) Cash Options account: I love trading options in a cash account. Options settle the very next day, so any profit you made today, will be available tomorrow for trading. Using a cash account also limits you to "over-trading" today, because once you've exhausted all of your funds for the day -- you're forced to wait until tomorrow. 3) Prop-firms that focus on equities: CMEG and Frontier are the leading firms at the moment, but this has changed (often) over the years. If you're not intersted in futures, or options, this is -- effectively -- the only way to go. In any case... I have almost a decade of experience trading in "small" accts... Feel free to ask questions if desired. GL...STAY GREEN!

Hi all, So I was going through some old messages that I've received over the years, and I stumbled upon a question (and my subsequent answer to) from a fellow trader who asked If I wouldn't mind sharing the strategies I used while growing my CMEG account -- twice -- from from a couple thousand, to over $20k each time. I'm going to paste my response below, because: 1) I think it may inspire someone on the fence relative to trading by providing an over-the-shoulder look into my days, 2) encourage those of you out there who may be doubting yourselves (because if a guy like me can do it -- ANYONE CAN) , and 3) highlight the notion that trading is NOT rocket-science, and largely dependent on our own personality/psychology. I've said it 1,000 times, and I'll say it once more: Trading is 90%+ psychology. I could teach my 7-year old daughter how to trade, but I'll never be able to control her mind....That portion of her being, as it is with all of us -- is an inherent battle within ourselves that very few external influences could effectively sway. As always, questions/comments are more than welcomed.... -- ---- --- --- -- --- ---- --- --- -- ---- --- --- Hi xxxxxxxxxxx, To be honest, I didn't trade much differently than my "normal" way of going about things. During the first run, I had to take somewhat smaller positions, and I did find myself trading more of the low-float variety, but once the account was around $3-4k, trading normal is all I did. My "normal" position size varies, depending on a few things, but my ideal trade is a mid-cap stock (priced in the $15-40 range), with medium to high float, and a tight spread. I like to start with 200-400 shares, then scale in to about 2-3x my initial take as my comfort level with the trade increases; if I don't gain comfort with the trade, I'll stick with the initial entry, or stop out. Anyways..., as the account grew, I would occasionally take more chances, but for the most part -- I just kept things "normal," as mentioned... The strategies I use are both simple, yet complex. Andrew would probably laugh at my saying "simple" (he calls me a very complicated trader, lol), but that's only cuz I'm looking at so many things at once (I call it the "big picture"). The first thing I always do is get a feel for the overall markets: I listen/watch CNBC, search for headlines, and check the major indices... I start trading the premarket around 8:45 am...with very small position sizes... I call this my "warm-up" for the day; kinda' like a football player warms up during his pregame... During this time, and as I'm filtering through my scans, I ALWAYS check the day charts of the stocks I'm interested in. I ask myself, "what is this supposed to do today; which way will it end based on a swing traders perspective?" By about 9:00 am I usually know what I'll be trading on the day, AND I have a very good idea of which way I want to trade the stocks on my list (but things can, and do change). At 9:30 am I'm usually hyper-focused on 1-2 stocks. I'm waiting for confirmation that my pre-market analysis is panning out. Usually it takes a few minutes, but there's always a huge chunk of volume that'll come in and move the stock one direction, or the other... At this time (about 4 minutes in), I've usually already begun to scale in, and will add to my position on obvious pull backs. If we get a clear cut 5-minute candle (white, or red), I'll usually play that direction till about 9:45 am (scalping profits, and reentering on pull backs). Again, though, things can change...so I'm always ready to stop out... At about the end of the first 15 minutes (this time is often ruled by "flag" type patterns; which are easy to see on the 1-min chart), I'll watch the 5 minute chart for reversal dojis; I guess I should clarify that I'm primarily using the 1-min chart for entries/exits during the 1st 15 minutes. By this time (~9:45am) my attention is now spread over about 3-6 stocks, and anything that's hitting my momentum scanners. Again, I'm looking for reversal dojis on the 5-min chart (or anything else that would indicate a reversal), and using the 1-min chart to enter, scale in, exit, etc... After this reversal is over, I'll often take another reversal around 10am ish, set a hard stop, then walk away... I HATE trading after 10:00/10:30 am, so my goal is to set it, and forget it from here on... Often times I'll fall victim to more trades, though....but again-- my goal is to be done after I've closed out the trades I took at 9:45. After a short break, I'll come back to the computers, and see if there's anything else worth taking a "set it/ forget it" type trade..., and then I'll handle other business (I used to have a YouTube channel, but now that I've deleted it, I have lots of free time! Lol ***edit -- I actually brought the YouTube Channel back last week; just search my name, Daniel Thomas, and add Day Trader at the end and I'll pop up)*** EVERYTHING I do is rooted in the ideals of support/resistance. Whether it's a pattern, a candle formation, a previous area of consolidation, walls/stacks in level 2, a moving average, VWAP, etc... IT'S ALL THE SAME. We're either going to fight the support/resistance, then violently push through, Or we're going to bounce (off the supportive/resistive area). So I look at all of it....and I'm looking it all somewhat simultaneously. There is ALWAYS a very obvious sign when we approach support/resistance, so having an open mind (to incorporating every thing I'm capable of seeing) helps me take high probability trades. I think this is why Andrew calls me "complicated," because when most traders are looking for a finite "system" for taking trades, I handle it more in a more multi-dimensional way. Anyways... I think people can trade ANY "style" with a small account. Of course it's harder due to the capital limitations, but it's possible to trade whatever style you're comfortable with. With a $1,000 account, and receiving 4:1 leverage, you can take roughly (depending on maintenance requirements and leverage restrictions): 800 shares of a $5 stock, 400 shares of a $10 stock, 200 shares of a $20 stock, etc... The key is to trade within your comfort zone, and ignore everybody/everything else. If you like flags, play low floaters... If you like obvious reversals, play mid-to-large caps. 100 shares of a $40 stock that moves $2 is $200 gain/loss. And 1,000 shares of a $4 stock that moves .20 cents is the same (+/- $200). Pick what fits your personality, and run with it... Also... keep in mind that with a small account, it's almost necessary to take on more risk than you normally would. At some point there is a cost to doing business (commissions, platform fees, etc.), so making 2% on a $1,000 account isn't going to pay the bills. My point is, even though you're in a smaller account, your risk is still present. I look at "small" accounts as an "opportunity" to trade somewhat normally, with a significantly tilted risk to capital. In other words... All I need is a few good days to even out my risk on capital, but I know/understand that a bad trade on day 1 (or 2...or 3...etc..) has the potential to blow up the account. I think the $4k mark, give or take, enables me to trade nearly identical to the way I trade in a $50k account. The problem many traders run into (I know I did) is taking on larger risk as the account grows larger (primarily by taking on larger sizes). If you can moderate what you do as your account grows, and you trade anything like I do -- when you get to $4k you're off and flying... Moral of the story... Pick a style that fits YOUR personality. For me, its mid-cappers with tight spreads and respectful float metrics. I can trade the low-floater pennies too...which I do on occasion, but they're not necessary; even if you have a "small" account. Avoid over-trading, avoid jumping the gun (FOMO), and take what the market gives you. If you don't see a trade -- don't trade. The markets aren't going anywhere; there is always another trade waiting on the horizon... And I'll end with this... I have talked to a lot of people that have found success in waiting for the first 10-15 minutes to pan out before taking a trade. There's a "sweet-spot" around this time every morning where the range to come is still profitable, and yet the volatility has simmered down. And I say "sweet spot," because-- again-- I think trading after 10/10:30 leads to more problems than it's worth (namely over trading with minimal reward potential). Day traders DO NOT trade for 40 hours per week like a "normal" person works their job(s). We prepare, study, etc for 40 hours (or more) per week, but our actual trading is MOST EFFICIENT for just that first hour, or so, of the day. My biggest struggle when going full time was appreciating this reality; that the money is made from 9:30-10:30, and sticking around much longer is most often a bad idea (unless you're just watching, but NOT actively trading). This is why I'll still take a trade after 10, but i WILL NOT (I try not to) sit around and watch it... I'll put a hard stop in, then come back around 1:30/2pm to see how it panned out.. In any case... I know I probably didn't answer your question like you hoped for, but I'm not into selling pipe dreams and false "strategies." The BEST thing any would be trader can do is get in repetitions....preferably in simulator...then trade the markets based on THEIR unique personality. I swing a golf club differently than you, I shoot a basketball differently, and I even sing karaoke differently (okay, I never really sing karaoke)... We can learn from each other, of course....implement things we see others do into our personal game plans...., BUT no matter how closely you study my golf swing, free throw, or vocals -- yours will ALWAYS differ... Trading the markets is very much the same... Keep me posted as the account grows... STAY GREEN, Daniel

Hi Cindy... I just recorded a lethargic video specifically to answer your question. Use the 1.5x button to speed it up... Let me know if this helps. I haven't seen Andrew's video yet, but it's probably a much better explanation. Here's the link: GL; STAY GREEN!

You need Level 2 as a DayTrader. In my humble opinion, it's just as valuable-- if not more -- than the actual charts. I would gander that 85%+ of my entries and exits are motivated by/through hyper-focusing on level 2. The charts get me interested, patterns direct my flow, but Level 2 is almost always responsible for my opening/closing a trade. I HIGHLY recommend you subscribe to the $150 package... GL; STAY GREEN!

I second this question... Robert... Anything "special" we need to do in order to see these metrics? Thanks! STAY GREEN! DT

Hey Greg... we're not going to make it. Maybe next year we can swing it. Have a great time!

If you guys are talking slopes like the one in the picture, there's no way! Lol... I haven't been on skis since 1997....and even then -- it was only once! The imagery is amazing though. Imma' try to talk the wife into it, though she's a Jamaican -- who loves beaches and sunshine -- so I have my work cut out for me! Lol... I know for certain that I would enjoy the trip... I've always wanted to visit Alaska!

Hey everybody... Just wanted to chime in; since we're encroaching upon tax season... According to my CPA, there are actual advantages to using MTM.. I'll try to summarize below with examples: Let's say you lose $99k trading.... If you DID NOT elect MTM, then you can ONLY write off $3k/year until that $99k is recouped. If you make zero money trading year after year after year --- then you're looking at about 33 years to break even on this "write-off." On the flip side --- if you DID/DO make enough money -- in any given year -- to offset your losses from a previous year -- then that "gain" can be written-off based on your previous years' loss... Here are a couple of examples: Example 1: You DID NOT elect MTM, and in 2018 you lost $99k trading... If you throw in the towel on trading, you can write off $3k/year for 33 years.... That would suck....lol... one year of losses; 33 years of write offs.... ---That said.... If you happened to sell a house, or realize some other "capital gain," before the entire amount is written off --- then you can deduct THAT amount from the $99k you lost in 2018... For example: You lost $99k in 2018 trading..., but in 2019 you sold a house and GAINED $50k... Well... You can write-off $3k in losses from 2019, and offset $50k from your capital gains in 2019..., which leaves you with a remaining "write-off" balance of $46k for 2020......... ($99-$50-$3 = $46). Example 2: You DID ELECT MTM, and in 2018 you lost $99k trading... If you elected in time, you can actually write off the ENTIRE $99K (as opposed to only $3k/year)... So, for example, your "other job" brought in $100k in 2018, and you lost $99k trading --- your tax liability would only be based on the $1k net profit you realized on the year... The examples above are clear as day... If you lose money day-trading.....AND...you elected MTM in time (per IRS guidelines) -- then you're set! If you lost last year, however, and made money this year....then you may want to consider ignoring you "MTM election," and taking the capital LOSS instead... Hope that helps .... And, for liability reasons --- it's all per my CPA... STAY GREEN people!! Daniel Thomas

I figured it would. Thanks for confirming... As far as it being a back-end DAS issue... It may be, but it's something pertaining to the CMEG version of DAS only ("Traders Elite Pro"). I say this, because I don't have the same issues when I use DAS with my Interactive Brokers account. With IBKR, I can just use my normal hotkey (sell at bid - .05 cents). My guess is CME has some sort workaround that allows US residents to clear through the various brokers they work with, without subjecting us (US residents) to the PDT nonsense; and this "work around" somehow involves them recording/documenting the order under their entity (as opposed to our entity/name), so the process is seamless... I may be completely wrong, though, so don't quote me... If this is the case, they probably disable the ability to place an order lower than bid (when on SSR), so they don't end up on the figirative hook for an order they cleared (filled for us), that shouldn't have gone through. As we all know, you can still short a stock on SSR, you just can't hit the bid when doing so... And disabling our ability to do so inadvertently is probably a safe bet on their part (again, I'm speculating, and could be completely wrong)... Anyways.. glad the hotkey proposal worked.. when there's a will, there's always a way! Lol... STAY GREEN people!

Try re-configuring a hotkey that sells on bid PLUS (rather than minus) .01 cents. I personally don't have a hotkey for this, but I presume it would work. The way I personally do it is one of two ways: 1) I click the ask within the level 2 montage, it populates the price box with that number, then I hit the sell button. 2) If the spread is wider than a few cents, and I want in below the ask, I click the bid within the level 2 montage, it populates the price box with that number, then I click the up arrow once or twice (extra step compared to the previous version), then I hit the sell button. When you click a number in the level 2 montage, your order box will automatically default to a "limit" order, and the price box will reflect whatever number within the montage you clicked. You can also double click anywhere in the chart, and that price will populate in the price box within your montage. Lots of ways to get it done... Practice makes perfect. It's a lot easier to submit these types of orders (shorting SSR stocks) with in my Interactive Brokers account, because I don't have to jump through these hoops (like I do with CME), but where there's a will -- there's a way! Good luck; STAY GREEN!

It's not... I answered in detail below. #1) I actually experienced this for the very first time today. I normally don't go long...especially when a stock is on SSR, lol....so it was new to me when it happened. I was able to get out of the position by placing a limit order (rather than using my marketable limit order hotkey). #2) I agree... This is also an issue with Interactive Brokers, but it's definitely a more prominent issue with CME. Also, with IKBR, when the "S" goes away (when they run out of borrows), often times there will be a few hundred/thousand that become available mid-day. If there's a pattern worth shorting, and I'm still trading at that time -- I'll often get lucky and snag the few borrows that came about (I assume they were freed up due to another trader covering their position). CME never grants me this fortune, however, so I've been trying to adapt my trading (in my CME acct) to focus more on going long, so there is never a stock that I can't get in due to no borrows being available. #3) This is not correct. I trade in two accounts every single day: 1) IKBR, 2) CMEG. I short stocks -- on SSR -- literally every single day in CME. If you use a marketable limit order as your hotkey, you will not get filled if that hotkey is "sell/short on bid minus xxx cents." You must either: 1) create a new hotkey that looks something like this: "sell on bid PLUS XXX cents," or 2) use limit orders above the bid. The fastest way I personally execute shorts on CME's platform when the stock is on SSR is via limit orders. I double click the bid in the level 2 montage, then immediately click the arrow up once or twice..., then press sell... I then wait. If the price drops, and the ask drops below my order, I cancel the initial order, then repeat the aforementioned steps (unless I'm okay with playing the waiting game; ie - waiting for the price to come back up to my order).

Wow... Just perusing the forums, and stumbled upon this thread. I've been using CME for most of 2018 now; mainly in a smaller account, which I try to take at least a few trades in daily (my primary account is with IKBR). In any case, I've never experienced this issue... I have had a hard time (with CMEG) placing marketable limit orders when a stock is on restriction (SSR), so my workaround is to place a LIMIT order between the bid/ask, and the system always accepts it. I prefer the way the DAS platform operates in conjunction with IKBR, in that I can place a marketable limit order -- even below the BID -- but it just won't fill unless it drops lower first, then ticks up... Based on my experience with this, I would recommend trying this in the future: If you cannot get out of a position using hotkeys (probably most often resulting in an attempt at a marketable limit order) due to this crazy rule, try placing a LIMIT order instead. I know it's different than the issue described, but my situation (mentioned above) does share similarities with regards to the technology. Please keep us posted if this continues to happen. It's definitely NOT something I'd be happy with... And considering I get asked about CMEG a lot (due to my using them on my YouTube channel) --- I would like to include this sort of feedback when asked about them pros/cons of using them. Have a great day people: STAY HUMBLE; STAY GREEN!